Key Points
When you turn 65, you may end up bringing home less Social Security income.
Many people aren’t aware of, or preparing for, this change.
You should plan for it in your budget so you understand what to expect as you age.
You can claim Social Security retirement benefits starting at 62, and many people choose to do that, or to claim shortly after eligibility.
An early claim relative to your full retirement age will shrink your monthly check, but a good number of workers are willing to accept that trade-off because they want to retire early and need Social Security to help them do it.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
One thing you should be aware of, though, is that your net income from Social Security checks is most likely going to shrink starting at 65. Here’s why that’s the case for many seniors, what you should do to plan for it, and why it is not necessarily always a bad thing.
Adult looking at financial paperwork.
Image source: Getty Images.
Here’s why your Social Security check is going to shrink at 65
If you have claimed Social Security before age 65, you must be aware that a big change is coming once you hit 65. It stems from the fact that you will become eligible for Medicare for the first time.
Many seniors must sign up for Medicare as soon as they reach eligibility age, because they will face lifetime financial penalties if they don’t. Unless you qualify for a Special Enrollment Period or you enroll in a Medicare savings program, you will end up paying an extra 10% penalty for each 12-month period that you could have signed up for Medicare Part B but didn’t do so if you didn’t have other qualifying coverage.
However, once you sign up, you’ll generally owe Medicare Part B premiums.
In 2026, Medicare Part B costs $202.90 per month if you pay the standard premium. Premiums go up most years because of inflation and rising healthcare costs, so the cost will also go up most years.
However, many retirees have Medicare costs taken directly out of their Social Security checks. If you do, once you have Medicare coverage, you can expect that your net Social Security checks will get smaller because you now have your health insurance premium costs automatically withdrawn from the monthly income you collect.
This isn’t necessarily a bad thing, as Medicare is an affordable health insurance coverage option many retirees look forward to becoming eligible for. But if you don’t realize that you’ll have to pay premiums, or that they come right out of Social Security, you may be caught off guard when the payouts you get from Social Security shrink.
Medicare is an important benefit for retirees — but be sure to understand your options
Medicare Part B is just one of your options for getting coverage through Medicare. You should explore all your coverage options, including Medicare Advantage plans and Medigap coverage, to get the plan that suits your needs.
The first key thing to know, though, is that your net pay from Social Security will likely decline when you switch to Medicare coverage, so you’ll need to budget accordingly.
The $23,760 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.
View the “Social Security secrets” »
The Motley Fool has a disclosure policy.
